Articles in this set
Regional policy could be the biggest victim when the EU begins the fight over where to cut back spending.
The Common Agricultural Policy is not the only source of European Union funds for the countryside. Rural areas, which make up 90% of the EU's landmass, also do relatively well from regional funds. In 2007-13, around €71 billion of regional funds are being targeted at rural areas, compared to around half that sum in the previous multi-annual budget. Over the same period, rural areas will get a further €87 billion from CAP rural development funds.
In the early part of this decade, rural areas saw faster growth rates and bigger falls in unemployment than towns. But these seemingly favourable issues mask a more troubling picture of lower-than-average incomes and migration away from the countryside. Average rural incomes are 25%-30% lower than in urban areas, but can be up to 50% lower in central and eastern Europe.
Earlier this month (7 April), a paper drafted by the Hungarian government, the current holder of the presidency of the EU's Council of Ministers, concluded that the problems of depopulation and young people moving out of the countryside were leading to “serious demographic changes”, and that these changes required that more political attention be given to creating rural jobs and building rural infrastructure.
As ministers worried about rural depopulation, five pan-European interest groups came together to launch a “rural coalition” aimed at giving a stronger voice to rural populations. Thierry de L'Escaille of the European Landowners' Organization, one of the five groups, says: “There is not enough attention [paid] to agricultural policy and the environment from regional policy.” He would like to see regional policy more focused on keeping people – and not just farmers – in the countryside. “It is not only about keeping farmers active; they need services around them,” he says.
Some experts have cautioned against over-emphasising the role of farming. Hervé Guyomard of the French National Institute for Agricultural Research has noted that service industries have increased their contribution to the rural economy, while the contribution of agriculture and forestry has declined.
What does this mean for the constellation of EU funds? In 2009 a report by Fabrizio Barca, the director-general of Italy's finance ministry, suggested that all funds for rural areas could be merged into one pot, although having raised this radical proposal, he then himself rejected it. Merging all funds now seems very unlikely, but the Barca report has upped the pressure to ensure that different sources of funding for the countryside are spent in more consistent ways.
Most viewed in Economics
Finance ministers agree to freeze nearly €500m unless Hungary corrects public deficit by end of the year.
The European Union's aid to economically deprived regions and social groups has become a battleground for arguments over the size of the Union's budget.
Co-financing share cut to 5% for six member states.
The Parliament warns against shrinking the budget for cohesion policies.
The EU must discuss the role of cohesion policy at the highest political level